Searching for that Needle in the Haystack

Kevin DouganPosted Jul 24, 2018

As a Jr. Mining Resource investor, it has become harder than ever to find companies of merit, which are actual real opportunities to invest in. My formula for success is when I am in need of fresh ideas is fairly simple, I always go to my favorite website, 321gold. I go to the sponsor page and peruse the companies that Bob Moriarty has taken an interest in.

Why you ask ???? Simply in my opinion he is the most successful writer and analyst… bar none. He has a knack for finding early entry companies that most investors and so-called experts have never heard of. I think he has found an interesting play that definitely deserves my attention and due diligence. Let's take a look under the hood, peel back the onion… and see what we have.

The name of the company is Black Tusk Resources… symbol (TUSK.) It is currently trading at 19 cents. The reason I really think it has homerun, if not grand slam potential is the absolutely insane number of shares outstanding. It has a microscopic 14 million shares outstanding and 19 million fully diluted after the latest financing closes. What really seals the deal for me is 50% insider ownership. It is this kind of share structure that causes stocks to really take off with even the hint of good news.

The company became public in November of 2017 so we are getting in on the ground floor and much has transpired in only 8 months. The name of the company, Black Tusk comes from a very scenic and well climbed, extremely challenging mountain just south of Whistler, B.C. The name Black Tusk connotates positive brand awareness, a mark of smart promotion.

The share structure is super tight so we checked off that very important box. Now let me tell you what I gleaned from speaking with management. The company is being run by Richard Penn, a young yet experienced & determined CEO. He is very well versed and articulate and his passion and enthusiasm is infectious. He cut his teeth in the financing and capital raising side of the business which is a major plus, as this is always the major challenge for Juniors. He raised this company from the ground up and did not go the way of reviving a shell company, as most Juniors conveniently do. This tells me is he is willing to roll up his sleeves and wade through the exhaustive hoops and barrels of the complex regulatory process. It shows tenacity and perseverance which is needed to see these Juniors to the Promised Land, as it is not an easy road.

Along the way he was able to bring with him friends and family who believe and trust enough in Richard to stand behind him with seed money. They are willing to go along with him on this arduous process of creating a successful mining company. His partner in the company is CFO Roman Rubin, who also is a veteran in the raising of funds from the Toronto markets. There are financing colleagues & associates from both the major financing hubs for Juniors as Richard has solid ties to Vancouver capital. I cannot stress how important it is to have access to capital and investors that will stick with you through tenuous times.

Ultimately the most important factor is finding a property that actually has the potential to unearth the goods when it is explored and drilled. Black Tusk, I believe might be on to such a beast. Richard Penn scoured the Kootenays with his team. They carefully and methodically analyzed the rugged harsh terrain for days trying to find the ideal property and in the process earned Richard Penn a crash course in Geology 101.

While researching this article, I discovered that Cream Minerals worked a similar property during the boom era. They produced some impressive results but sadly went belly up during the bust years… running out of funds. I know because that play was one of my greatest losses I’ve ever known. Ouch!!! I got interested 15 years ago because I knew this area had great potential. Hopefully, Black Tusk can get me my money back as I have also been intrigued with nuggety deposits. The Mother Lode in California comes to mind as well as Comstock in Nevada … both beasts.

As in much in life it's not what you know but who you know. Lady Luck always plays an important role in life. Richard was introduced to a father & son prospecting team, Jack & Bob Denny. Jack is President of the Chamber of Mines of Eastern B.C. He is a 3rd generation prospector focused on the Kootenays. He knows this land inside and out. They felt Goldsmith was one of the best land packages available of the 14 claims they had staked. A deal was struck rather quickly and amicably - a few beers, a burgeoning friendship and a lifelong dream was well on its way. It is a win-win for both parties as the Denny family still hold a percentage of the smelting rights if it ever becomes a mine. I’m sure Richard’s enthusiasm and drive didn’t hurt one bit.

The Goldsmith property is located in South Eastern B.C. and recently expanded to 823 hectares with access to water, power and roads. It is high grade nugget type Gold. Recent grab samples include robust and encouraging results. Gold assays of 29.89 g/t & 27.5 g/t show some definite promise. Air geophysics and LIDAR survey (3-D imaging) will help dictate where the team will focus their attention this summer. They will have over $700,000 in the till to fund future drilling. There will be trenching and excavating this summer to identify significant targets for an aggressive drill program earmarked for 2019.

What really impressed me is Black Tusk has been able to raise money along the way… starting out at a dime, then 15 cents and now at 20 cents. It shows me that the folks that got in early have already doubled their money. Of course, they are in this for the long run, as this company is in its very early development stages. It does show belief in what Richard & Roman have accomplished so far and funding continues to pour in from many of the original investors. The burn rate for the company is a very reasonable $12,000 per month so they are very careful spending shareholders money and will have plenty of funds for the ultimate truth meter … the drill bit.

To hit these Grand Slams you have to take chances. I believe you can mitigate the risks by getting to know management and what drives them, what their true motives are. Richard Penn passed my first sniff test. While I will not be jumping in with both feet right away, I will dip my toe in the water and see how this develops. A major factor in me even considering investing in Black Tusk is the fact that management understand the importance of how to Market & Promote. It is a key factor in running a successful Junior. Many Junior Mining CEO’s consider the marketing aspect as having a fax and phone. Richard understands that fully, the fact that they have chosen to advertise on 321gold, to me speaks volumes. There is no one that can move a stock than when Bob Moriarty gets behind a company and writes it up. He has a loyal following of serious high net worth investors that pounce on new opportunities. Bob Moriarty’s track record speaks volumes. If you have never seen what he can do … I challenge you to compare before & after prices after his articles are published. Astounding results!!! He is a huge fan of nugget type deposits and was first to get his readers into Novo Resources. As linguist Yogi Berra once quipped … Will we see déjà vu all over again??? All I know is, I want a chance to get my $$$ back … I got creamed by Cream!!!

In order for there to be smoke … there must be fire… and some great drill results could be the catalyst that thrusts Black Tusk into the limelight. For now, it is a time to accumulate TUSK on any weakness in the markets and to be patient as Job and as wise as Solomon.

As the title of this article suggests it truly is like finding a needle in a haystack to find a quality Junior but you've got to roll up your sleeves, put on your boots, get into the hay and start looking. Déjà vu all over again.

Blue Sky Marketing is a contract marketing firm connecting under valued Jr. Miners with interested investors. It is run by Kevin Dougan, a former IR person and 15 year successful investor and follower of the Jr. Mining Sector.